The greatest injustice

Leigh Phillips reviews Treasure Islands by Nicholas Shaxson

Put down this magazine now and rush to your local library or closest bookshop and get your hands on perhaps the most important book to appear in recent years for those who care about social justice. Financial Times journalist Nicholas Shaxson’s book is not just an exposé of tax havens that is as page-turning as an airport thriller, with James Bond-like characters colluding with corrupt politicians and their armies of accountants and lawyers in labyrinthine plots to squirrel away trillions – yes trillions – in palm tree-lined Caribbean colonial outposts (and Channel Islands and, er, Delaware). It is a veritable weapon of mental self-defence.

So much of the analysis and discourse surrounding the reverse in western public policy over the past 30 years, from Keynesian management of the economy and support for social protection to laissez-faire frameworks, has focused solely on ideological changes and the emasculation of social democracy and labour. 

The gaping hole in this tragic tale is the crucial, perhaps dominant role offshore finance played in this seismic shift. This hole is amply filled by Shaxson’s tome.

More than half of world trade passes through tax havens. A third of foreign direct investment is channelled via these fiscal black boxes. A quarter of all global wealth is stashed by wealthy individuals offshore. And that’s just the legal end of things. 

The very same jurisdictions and methods are also used by drug smugglers, terrorists and third-world plutocrats, blurring further and further the distinction between ‘legitimate’ business and organised crime.

Few activists pay much attention to the problem of tax havens. Yet until these berserkers in the international system are eliminated, they are hamsters on a treadmill. The power offshore investors wield over elected governments is vast and ever growing. Shaxson makes a sound argument that tax havens are the greatest injustice the world has known.